This form provides boilerplate contract clauses that outline means of securing the funds for payment of any indemnity, including use of an escrow fund or set-offs.
Arkansas Indemnity Provisions — Means of Securing the Payment of the Indemnity In Arkansas, indemnity provisions are an integral part of contracts and agreements, ensuring that parties are protected from potential losses and liabilities. These provisions address the responsibility of one party (the indemnity) to compensate the other party (the indemnity) for any losses, damages, or expenses incurred due to specific events or situations. Arkansas recognizes different types of indemnity provisions to secure the payment of indemnity. Here are some notable variations: 1. Broad Form Indemnity: This type of provision holds the indemnity responsible for any and all liabilities, including those caused by the negligence or fault of the indemnity. It provides comprehensive coverage and protection to the indemnity, ensuring that they are indemnified for any potential losses arising from the actions of the indemnity. 2. Limited Form Indemnity: Unlike broad form indemnity, this provision limits the indemnity's responsibility and places restrictions on their liability. This type of indemnity provision commonly stipulates that the indemnity will only be liable for losses and damages caused by their own actions or negligence, excluding any responsibility for the indemnity's actions. 3. Comparative Indemnity: Comparative indemnity provisions establish that both parties share responsibility for any losses or damages incurred. The degree of responsibility is typically determined based on the percentage of fault contributed by each party involved. This provision promotes fairness and allocates liability proportionally, reflecting the contributions of each party to the unfortunate event. 4. Contractual Statutory Indemnity: This provision refers to indemnity clauses mandated by Arkansas statutes, which require certain parties to indemnify others as a matter of law. These provisions often arise in specific industries, such as construction, where contractors or subcontractors may be legally obligated to indemnify the project owners, architects, or other stakeholders for any potential claims or damages. Securing the payment of indemnity can be accomplished in various ways, and these methods are typically outlined within the indemnity provision. Common means of securing payment include: a. Insurance: Parties may require the indemnity to maintain adequate insurance coverage, specifically naming the indemnity as an additional insured. This ensures that if an indemnity claim arises, the insurance policy will cover the damages, reducing financial risk for the indemnity. b. Financial Guarantees: The indemnity can provide financial guarantees or collateral as a means of securing the payment of indemnity. This may involve posting bonds, letters of credit, or other forms of financial security to ensure that funds are available to compensate the indemnity if necessary. c. Hold Harmless Agreements: Hold harmless agreements are often included within indemnity provisions. These agreements bind the indemnity to protect and indemnify the indemnity from any losses, expenses, or damages resulting from specific events, actions, or situations outlined in the contract. Arkansas' indemnity provisions and means of securing payment aim to provide appropriate protection for parties involved in contractual agreements. It is important for parties to carefully review and negotiate these provisions to ensure they align with their specific needs, potential risks, and legal requirements.
